In 1973-74, he served the Whitlam Labor Government as an economic advisor to the Minister for Social Security, Bill Hayden, who was engaged in establishing Medibank and framing restrictive regulation for private hospitals and nursing homes. During this time McGuinness advocated the introduction of Medibank, against the interests of doctors who wanted health care to remain private.[2] Three decades later, in a Quadrant editorial, he poured scorn on the Whitlam government and the "plague of locusts" who worked for it, omitting to disclose his own central participation.[5] After working for Hayden, McGuinness's career was chiefly in journalism, including senior editorial positions at The Australian Financial Review (1974–87), where he became editor-in-chief in 1982. He also did column-writing for The Sydney Morning Herald, The Age and The Australian and in 1997 took over as editor of Quadrant, a position he held for a further ten years. In 2004, he had also stood as an independent on Leichhardt Council.

McGuinness died from cancer on Australia Day, 26 January 2008, aged 69, having recently stood down as editor of Quadrant.[6] He is survived by his daughter Parnell Palme McGuinness, named after Charles Stewart Parnell.

According to journalist colleague Frank Devine, "Paddy was the quintessential independent thinker, scorning humbug and stupidity. He was a bloodthirsty predator among those he identified as members of the chattering classes".[1] However, he was himself frequently criticised for pomposity and hypocrisy when, for instance, he accepted an Order of Australia award in 2003 despite a long-held, vocal contempt for such honours.[7]